Fitch cuts McGraw-Hill notes

Fitch Ratings said it affirmed the long-term issuer default ratings of McGraw-Hill Global Education Holdings, LLC (MHGE) and McGraw-Hill Global Education Finance, Inc. (MHGE Finance) at B+.

Fitch also withdrew the long-term issuer default rating of MHGE Parent, LLC and MHGE Parent Finance, Inc.

The outlook is stable.

Fitch said it downgraded MHGE's and MHGE Finance's senior unsecured rating to BB/RR2 from BB+/RR1 due to reduced recovery prospects estimated by Fitch driven by the company's new A/R securitization facility.

The agency said it generally assumes a fully drawn revolver and, depending on terms, A/R securitization facility when companies are under duress.

As such, the A/R facility and the resultant increase in senior secured debt reduces Fitch's estimated recovery value available for the MHGE notes, thereby driving the downgrade, the agency explained.

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